a A a A a A
Menu

Position: AML Package

26 September 2022

In July 2021, the Commission published the AML Package. This package should serve to strengthen the rules on combating money laundering and terrorist financing (called AML/CFT rules: Anti-money laundering/ countering the financing of terrorism). Febelfin believes that it is essential to develop a pragmatic approach based on an effective exchange of information to mitigate the risks of money laundering and detect financial crime.

 

The EU AML (Anti-Money Laundering) Package consists of a comprehensive and ambitious set of measures designed to make the EU financial system more resilient to money laundering and terrorist financing.

This package represents an important advance in the fight against these criminal activities and is expected to have a positive impact on the security of the EU. The AML package includes 4 legal measures:

  • A regulation establishing a new EU anti-money laundering authority (AMLA regulation). AMLA would indirectly supervise most financial institutions and establish rules to promote cooperation between national regulators and financial intelligence units (FIUs). It must also ensure that information on suspicious activities received at national level is shared between EU Member States. The AMLA would further directly supervise specific financial entities according to various criteria, and could impose appropriate administrative sanctions and fines.
  • A regulation that establishes anti-money laundering requirements for the private sector (AML regulation). It would impose detailed requirements on entities, including establishing policies and procedures, conducting audits and customer due diligence, and identifying beneficial owners of customers, as well as reporting suspicious transactions. These rules would apply directly to EU Member States.
  • A directive on ways to combat money laundering (AML Directive 6), which would require Member States to take measures to ensure that their financial systems meet anti-money laundering requirements (AML/CFT).
  • A regulation that amends the existing law on transfers of money (TFR). That would make cryptocurrency transfers more transparent and fully traceable, making it more difficult for criminals to use crypto assets to launder money.

Febelfin fully supports the overarching objective of the Commission to address the ineffectiveness of the current EU AML framework. This is positive for financial institutions but also for EU citizens. Febelfin believes that it is essential to develop a pragmatic approach based on an effective exchange of information to mitigate the risks of money laundering and detect financial crime. This package will transform the European framework to improve the detection processes of suspicious transactions and activities. In this way, the current loopholes in the law, which are still used by criminals to launder illicit proceeds or finance terrorist activities through the financial system, can be closed. For Belgian financial institutions, these new rules will have a positive impact in some areas, but they also pose significant operational challenges. For banks operating in several EU Member States, the introduction of uniform standards directly applicable in the EU can lead to greater consistency in anti-money laundering compliance. However, there will also be challenges, such as adapting internal procedures and customer due diligence measures. It is important that policymakers recognize and appreciate these challenges, as well as the efforts of financial institutions in 2024. The establishment of AMLA is a positive development, as this, together with uniform regulation, will strengthen supervisory cooperation. This will be an important step for financial institutions operating across borders.

Already following us? Stay up to date via Facebook, TikTok, Twitter, LinkedIn & Instagram.
© Febelfin 2024 - Disclaimer - Data Protection Policy - Cookie Policy